Mohazzabi v. Mohazzebi

BEHROOZ MOHAZZABI, Plaintiff, v. BEHZAD MOHAZZEBI, Defendant.

Case No. 19-cv-06453-SI

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

December 3, 2019

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND DENYING DEFENDANT'S MOTION TO STRIKE

Re: Dkt. Nos. 8, 14

Defendant Behzad Mohazzebi's motion to dismiss the complaint is scheduled for a hearing on December 6, 2019 at 10:00 a.m. Pursuant to Civil Local Rule 7-1(b), the Court finds this matter appropriate for resolution without oral argument and VACATES the hearing. For the reasons set forth below, the Court GRANTS defendant's motion to dismiss for lack of personal jurisdiction. If plaintiff wishes to pursue this lawsuit in another court that has personal jurisdiction over defendant, the Court recommends that plaintiff seek assistance from the Federal Pro Bono Project, available at 415-782-8982 or fedpro@sfbar.org.

BACKGROUND

On May 6, 2019, plaintiff Behrooz Mohazzabi filed this lawsuit in San Mateo County Superior Court alleging claims for breach of contract and fraud against his brother, defendant Behzad Mohazzebi.¹ After service of the complaint, defendant timely removed the case to the Court.

The complaint alleges that defendant orally agreed to personally guarantee repayment of aloan that plaintiff made to a third brother, Dariush Mohazzebi ("Dariush"), and that defendant has failed to make payments under that alleged personal guarantee. According to the complaint, on or about April 25, 2013, plaintiff orally agreed to loan Dariush $200,000, and defendant orally agreed to guarantee the repayment of the loan with interest. Compl. ¶ BC-1 (Dkt. No. 1-1).² Plaintiff alleges that by August 12, 2017, "Dariush Mohazzabi³ failed to make full repayment as originally agreed and as renegotiated[,]" and defendant "then failed to pay the balance of Dariush Mohazzebi's debt as promised, as per the personal guarantee." Id. at ¶ BC-2. On a "check the box" portion of the state court complaint form, the complaint alleges that "[t]his court is the proper court because the contract was to be performed [in California]." Id. at ¶ 7. The complaint does not contain any allegations regarding defendant's contacts with California.

On October 15, 2019, defendant filed a motion to dismiss based on lack of personal jurisdiction and failure to state a claim. In support of the motion, defendant has filed a declaration stating that he is a resident and citizen of Florida, where he has lived since November 2009. Mohazzebi Decl. ¶ 2 (Dkt. No. 8-1). Prior to November 2009, defendant was a resident and citizen of New Jersey. Id. Defendant states that he has never been a resident or citizen of California, never been employed in California, does not maintain any businesses or offices in California, and does not have any bank accounts in California. Id. ¶¶ 2-6. Defendant denies that he made any agreement to guarantee the loan plaintiff made to Dariush, and defendant states, "I have not met with Plaintiff in California at any time during the events alleged in the Complaint. The last time I met Plaintiff in person in California was approximately 10 years ago at a family wedding in Northern California in the summer of 2009." Id. ¶¶ 8-9.

Plaintiff, proceeding in pro per, filed an opposition that did not address personal jurisdiction. Instead, plaintiff's opposition addresses the merits of his breach of contract and fraud claims, and asserts facts that are not contained in the complaint, such as details about the parties' alleged conversations regarding the oral contract. See generally Dkt. No. 11. Defendant filed a reply, towhich plaintiff filed a sur-reply. Dkt. No. 13.⁴ In his sur-reply, plaintiff asserts that defendant regularly visits his two daughters who live in Los Angeles, California. Id. Plaintiff's sur-reply also acknowledges that defendant formerly lived in New Jersey and currently lives in Florida. Id.

LEGAL STANDARD

A defendant may move to dismiss the complaint for lack of personal jurisdiction. Fed. R. Civ. P. 12(b)(2). Where there is no applicable federal statute that governs personal jurisdiction, a district court "may exercise personal jurisdiction over a defendant 'if it is permitted by [the state's] long-arm statute and if the exercise of jurisdiction does not violate federal due process.'" Autodesk, Inc. v. Kobayashi + Zedda Architects, Ltd., 191 F. Supp. 3d 1007, 1013 (N.D. Cal. 2016) (quoting Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006). Since "California's long-arm statute allows the exercise of personal jurisdiction to the fullest extent permissible under the U.S. Constitution," a district court need only determine whether the exercise of jurisdiction comports with federal due process requirements. Daimler AG v. Bauman, 571 U.S. 117, 125 (2014). A district court's exercise of personal jurisdiction comports with due process when the defendant has "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). A court may exercise either general or specific jurisdiction over an out-of-state defendant. See Daimler AG, 571 U.S. at 127.

Upon defendant's motion to dismiss for lack of personal jurisdiction, "the plaintiff bears the burden of demonstrating that the court has jurisdiction over the defendant." Pebble Beach Co., 453 F.3d at 1154. However where, as here, a district court rules on a motion to dismiss for lack of personal jurisdiction without holding an evidentiary hearing, the plaintiff need only make "a prima facie showing of jurisdictional facts to withstand the motion to dismiss." Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995). Where undisputed, a district court must take as true the plaintiff'sversion of the facts. Am. Tel. & Tel. Co. v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996) (citations omitted). Conversely, "conflicts between the facts contained in the parties' affidavits must be resolved in [the plaintiff's] favor for purposes of deciding whether a prima facie case for personal jurisdiction exists." Id.

DISCUSSION

Defendant contends that this Court lacks personal jurisdiction over him because he is a Florida resident and he has never lived, worked or done business in California. Defendant argues the only allegation in the complaint that conceivably relates to jurisdiction - that "[t]his court is proper because the contract was to be performed here" - is legally irrelevant because an alleged oral promise made from outside California to guarantee a loan does not subject the promisor to personal jurisdiction in California. Plaintiff's opposition papers largely do not address personal jurisdiction, except to assert that defendant travels to California to visit his two daughters.

The Court concludes that it does not have personal jurisdiction over defendant. There is no basis for general jurisdiction, which requires that "the defendant must engage in continuous and systematic general business contacts" in the forum state. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004) (internal quotation marks and citation omitted). Here, there is no allegation that defendant has engaged in systematic business contacts in California, and to the contrary, defendant has filed a declaration stating he has never been employed in California and that he has no offices or bank accounts in this state.

There is also no basis for specific jurisdiction. A district court has specific jurisdiction over the defendant when the following three-prong test is satisfied:

(1) The non-resident defendant must direct [one's] activities or consummate some transaction with the forum or a resident thereof; or perform some act by which [one] purposefully avails [oneself] of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws;

(2) the claim must be one that arises out of or relates to the defendant's forum-related activities; and

(3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable.

Lake v. Lake, 817 F.2d 1416, 1421 (9th Cir. 1987). Plaintiff bears the burden of satisfying the first two prongs of the test. Schwarzenegger, 374 F.3d at 802.

Under the first prong, a plaintiff must establish that the defendant "either purposefully availed itself of the privilege of conducting activities in California, or purposefully directed its activities toward California." Id. at 802. "For claims sounding in contract, we generally apply a 'purposeful availment' analysis and ask whether a defendant has 'purposefully avail[ed] [himself] of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.'" Picot v. Weston, 780 F.3d 1206, 1212 (9th Cir. 2015) (quoting Schwarzenegger, 374 F.3d at 802). "For claims sounding in tort, we instead apply a 'purposeful direction' test and look to evidence that the defendant has directed his actions at the forum state, even if those actions took place elsewhere." Picot, 780 F.3d at 1212. Because plaintiff asserts contract and tort claims, both tests apply.

I. Purposeful Availment - Contract Claim

"A showing that a defendant purposefully availed himself of the privilege of doing business in a forum state typically consists of evidence of the defendant's actions in the forum, such as executing or performing a contract there." Id. "[T]he mere existence of a contract with a party in the forum state does not constitute sufficient minimum contacts for jurisdiction." Sher v. Johnson, 911 F.2d 1357, 1362 (9th Cir. 1990); see also Doe v. Unocal Corp., 248 F.3d 915, 924 (9th Cir. 2001) ("However, an individual's contract with an out-of-state party alone [cannot] automatically establish sufficient minimum contacts to support personal jurisdiction.") (internal quotation...